Now that computers and their associated components such as compact disk readers, printers and Internet connections have become ubiquitous, consumers are afforded several new and different options for purchasing goods and services. Internet shopping, through so-called “e-businesses,” allows a consumer to shop from the comfort of her living room. The consumer simply logs on to the e-business site through an Internet connection, browses the virtual store, makes selections and loads them into a virtual shopping cart. When the consumer is finished he/she proceeds to the virtual checkout counter. The cost of the goods and services are tallied, applicable tax, shipping and handling charges are added to the purchase, and the consumer pays for the transaction by providing a credit card number. Once the seller authorizes the charge card purchase, the consumer is so advised and the transaction is completed.
There are at least two difficulties associated with an e-business purchase. First, the rate at which the entire shopping experience occurs is directly related to the speed of the consumer's Internet connection. Today, 56 kilobyte (kB) modems operating over the standard telephone line are the most common route to the Internet. Faster connections such as XDSL and cable modems offer faster data rates, but they are employed by only a minority of the e-commerce consumers. The transmission data rate is the system bottleneck as it directly affects the speed at which the consumer can proceed through the transaction. Because of this data bottleneck, e-business sites selling products or services that require the display of extensive information to the consumer during the purchasing process are likely to create frustrated buyers. For example, the sell of clothing items likely requires the consumer to process through hundreds of styles and colors before a selection can be made. A slow data transfer rate (where slow is defined as the rate that causes the consumer to lose interest and terminate the purchase process before completing the transaction) dooms the transaction. Even the fastest data rates may not be fast enough for the busy consumer shopping at a well-stocked Internet-site store.
There is also the well-known problem of credit card fraud associated with Internet transactions. Most consumers are now accustomed to and have accepted the need to provide a credit card number when placing a telephone order. But there is still considerable hesitancy when the computer prompts the consumer to enter a credit card number, after which the number will travel through the unbridled Internet. Surveys have shown that at least 50% of consumers prefer either to send their order through the mail or fax it to the vendor, thus avoiding sending their credit card number over the Internet.